Japanese Prime Minister Fumio Kishida is battling to keep his grip on power after a massive funding scandal crashed already-weak public support for him and his long-ruling Liberal Democratic Party (LDP) just months before a September party leadership race.
Fallout from the scandal has raised the risk of Kishida becoming Tokyo’s latest revolving-door premier, even as Japan confronts an assertive China, economic fragility, and the possibility of a return to power by former U.S. President Donald Trump.
Kishida, a soft-spoken former foreign minister with a lackluster image, is already Japan’s second prime minister since Shinzo Abe resigned in 2020 after a unique, nearly eight-year second term that made him the country’s longest-serving premier. Abe, who had remained influential as the leader of the LDP’s biggest faction, the Seiwa Seisaku Kenkyukai, was shot to death by a lone assailant while campaigning in July 2022.
More broadly, the scandal highlights not only the inability of the LDP—in power for most of the past seven decades—to reform and rejuvenate itself, but also a fragmented opposition’s failure to capitalize on the ruling party’s chaos. The political confusion and lack of viable alternatives to the LDP threaten to postpone tough policy decisions and leave others in the hands of cautious civil servants.
“The predictable stability that characterized Japanese politics since 2012 [when Abe led the LDP back to power after three years in opposition] is in all likelihood over,” wrote political analyst Tobias Harris, the author of a book about Abe. “That stability, it turns out, rested on the effective demobilization of roughly half the electorate, deepening into a widespread sense of malaise in Japanese democracy. And this is where the malaise has led.”
Major LDP factions, including Abe’s, are alleged to have violated the political funds law by failing to report hundreds of millions of yen (equivalent to millions of dollars) raised from selling tickets to fundraising events while allocating the missing cash to dozens of lawmakers as unreported kickbacks for exceeding ticket-sale quotas.
Funding scandals are common in Japanese politics, but this one is unusually widespread. Ten individuals (including three elected lawmakers in the LDP) face criminal charges and some found guilty but prosecutors have not charged any faction’s senior executives, who have denied knowledge of the legal violations. Kishida, however, replaced four cabinet ministers from the Abe faction in December, and this week, a party heavyweight implicated in the scandal said he would not run again in the next general election.
These factions—subgroups led by party bosses—have been an integral part of the LDP’s internal dynamics since its founding in 1955 from the merger of two conservative parties. While electoral reforms in the 1990s weakened their role, they have remained influential.
The scandal—which emerged in late 2023 after a law professor found discrepancies in faction funding reports and filed a criminal complaint with prosecutors—is just the latest to hit Kishida, whose support had already been eroded by LDP’s links to the controversial Unification Church, which is considered a cult by critics such as Abe’s assassin; a rocky rollout of a national identity card system; and voter distaste for expected tax hikes to fund plans for higher defense spending.
Efforts by Kishida (who has not been personally implicated in the scandal) to repair his ratings—including by replacing the four cabinet ministers from the Abe faction, dissolving his own party faction and nudging several other blocks to follow suit, and promising to tighten political funding rules best known for their many loopholes—have done little thus far to stem the decline.
Kishida’s surprise decision to personally testify before a parliamentary ethics panel in order to pressure Abe faction executives to do the same cleared the way for passage of the budget for the 2024 fiscal year (which starts in Japan in April), it but failed to ease concerns over the origins of the years-old kickback scheme and how the money was spent.
“When did this start, and what were the funds used for? It has not become clear at all,” said Katsuya Okada, the secretary-general of the main opposition Constitutional Democratic Party of Japan (CDP), at a briefing for foreign media on March 12.
A Kyodo News agency survey published in early March showed that support for Kishida’s cabinet had hit a fresh low of 20.1 percent, while that for his party was at 24.5 percent, its lowest since returning to power in December 2012 but still above the CDP’s 10.1 percent.
Scandals over bribery and illicit donations have plagued the LDP for decades.
A shares-for-favors scandal toppled then-Prime Minister Noboru Takeshita in 1989, and another financial scandal helped briefly oust the LDP in 1993 for the first time since its founding in 1955, triggering reforms to the electoral system.
The reforms—which included tighter rules for political funds and the introduction of single-member electoral districts for the parliament’s lower house in place of multimember constituencies—weakened the influence of faction bosses, who for decades had backed rival candidates in the multimember districts, collected and dispersed campaign funds, and used their numerical clout to launch runs for the premiership.
Nonetheless, factions have continued to play big roles in raising funds, allocating party and cabinet posts and determining who wins party leadership races—and hence, determining who wins the premiership, as long as the LDP is in power.
Abe’s right-hand aide, former Chief Cabinet Secretary Yoshihide Suga, was elected as president of the LDP after Abe resigned in 2020, citing ill health. Suga came to power as prime minister with the backing of most factions, including Abe’s, although he belongs to no faction himself. Suga, however, stepped down a year later after his ratings plunged over his handling of the COVID-19 pandemic.
In the ensuing party leadership vote, Kishida defeated the popular Taro Kono, a U.S.-educated reformist maverick disliked by more traditional lawmakers, in a second-round runoff with the support of the Abe block.
Abe’s death, however, created a vacuum, as no clear successor emerged to head his faction. The scandal has also tainted the prospects of potential Kishida rivals within the LDP, such as former Economy Minister Yasutoshi Nishimura and former party policy chief Koichi Hagiuda.
With the scandal still swirling, it’s unclear how now-disbanded factions will regroup, though few expect them to disappear entirely despite LDP pledges to eradicate their role in fundraising and personnel decisions and improve overall party governance.
“For all the criticism of factions, no one has come up with a proposal for how to restructure, or a model of governing in the face of this unraveling,” said Columbia University professor emeritus Gerry Curtis. “The system has been atrophying for two decades … but there are no powerful bosses to run the show. There is a lack of energy, a lack of imagination, a lack of leaders.”
The prime minister, who is scheduled to make a state visit to Washington, D.C., starting April 10, has denied rumors that he is considering calling a snap election for April 28, the same day that three national by-elections are scheduled, and political experts say such an early poll appears unlikely given the LDP’s low support rates and a tight schedule. No lower house vote is required be held until October 2025.
Speculation persists that Kishida might call a lower house election before the current parliamentary session ends in June in hopes of winning enough seats to ensure that he is reelected as the leader of the LDP in September. A long-shot scenario has Kishida making a surprise visit to North Korea to resolve a long-running stalemate over Japanese citizens kidnapped by Pyongyang’s agents decades ago.
Japan’s four main opposition parties have cooperated in attacking the LDP over the scandal, but they face hurdles to uniting behind allied election candidates due to policy differences and personal rivalries—although some have suggested that they join hands under the banner of political reform, setting aside other differences for now.
Continued fragmentation means that chances seem slight that the LDP and its junior coalition partner, the Komeito party, would lose their lower house majority and fall from power.
Still, a poor election performance could force Kishida to resign to take responsibility.
Overt efforts inside the LDP to dump Kishida have so far not surfaced but political analysts said the prime minister could face a party revolt if the LDP fares badly in the three national by-elections in April.
The prime minister also faces a tough decision on how to keep his promise to punish members involved in the scandal, since he himself until recently headed a faction whose former treasurer has been found guilty of violating the political funds law.
For his part, Kishida may be hoping that recent wage hikes and the central bank’s March 19 end to eight years of negative interest rates can cheer voters, and that public outrage over the scandal fades, allowing him to hang on to win another three-year term as LDP president.
“The LDP could make minor adjustments, promise some things … and the public gets bored and wants to focus on other things, so it blows over and things go on as usual,” said Curtis, the Columbia University professor.
But if his ratings remain at rock-bottom, the Japanese leader could be forced to bow out ahead of the party poll. Japanese media is already focusing on Kishida’s possible successors.
Speculation has simmered that that male-dominated LDP might try to change its image by choosing its first female leader. Foreign Minister Yoko Kamikawa—a Harvard University-educated, three-time former justice minister—has been floated as a potential candidate in that case, although some question whether the 71-year-old lawmaker would galvanize voters simply by virtue of her gender. Some media have also floated the possibility that Tokyo Governor Yuriko Koike, a former LDP member and Japan’s first female defense minister, could seek a seat in parliament, positioning herself to return to the party and seek its presidency.
Trade Minister Ken Saito, another Harvard-educated lawmaker, could be a dark horse candidate.
Other names floated include those of former Defense Minister Shigeru Ishiba, a four-time failed candidate for LDP leader who is popular with voters but less so inside his own party; Kono, who is currently the minister for digital transformation; former Environment Minister Shinjiro Koizumi, a telegenic son of popular former premier Junichiro Koizumi; hawkish Economic Security Minister Sanae Takaichi, who bid unsuccessfully in 2021 to become Japan’s first female premier; former Internal Affairs Minister Seiko Noda, another female lawmaker who came in last in the 2021 party leadership vote; and LDP Secretary-General Toshimitsu Motegi, a faction leader who fares badly in voter surveys.
Amid the political uncertainty, policy decisions—such as when to start raising taxes to fund a planned major hike in security-related spending, to nearly 2 percent of gross domestic product by 2027—are being delayed. An even deeper danger, however, may be a further deepening of public disaffection with politics in general.
“There are difficult decisions to be made, and nobody wants to make them,” said Jesper Koll, an expert director at Monex Money Group Japan. “As a result, there is bureaucratic incrementalism in all sorts of policies. There is bureaucratic creep rather than [a] visionary leap forward.”
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